If the stock market can move sectors and stocks, which sectors and stocks are most likely to move in step with the stock market? Sectors and individual stocks most highly correlated to the overall market can use the S&P 500 SPDR ETF (SPY) as a directional indicator.

The following sectors are most correlated the S&P 500 SPDR ETF (SPY).

XLI Industrial Select Sector SPDR Fund
XLB Materials Select Sector SPDR Fund
XLF Financial Select Sector SPDR Fund
XLE Energy Select Sector SPDR Fund
XLK Technology Select Sector SPDR Fund

The following individual stocks are most correlated the S&P 500 SPDR ETF (SPY).

MRK Merck & Co Inc
COP ConocoPhillips
EMR Emerson Electric Co
BK The Bank of New York Mellon Corp
FDX FedEx Corporation
SPG Simon Property Group Inc
USB US Bancorp
SBUX Starbucks Corp
CVX Chevron Corp
GE General Electric Co
IBM International Business Machines Corp
CVS CVS Caremark Corp
GOOG Google Inc
XOM Exxon Mobil Corp
HON Honeywell International Inc
CAT Caterpillar Inc
UTX United Technologies Corp
LMT Lockheed Martin Corp
RTN Raytheon Co
WMB Williams Companies Inc
AAPL Apple Inc
T AT&T Inc
TWX Time Warner Inc

Dave Mecklenburg is the Editor-in-Chief of TigerSharkTrading.com.